ABU DHABI—Facing a host of military threats, the oil-rich monarchies of the Persian Gulf have been boosting outlays for defense equipment—providing a shot in the arm for Western arms suppliers facing government cutbacks in much of the rest of the world.

Lower oil prices may eventually damp the buying binge, as they did during a price slump in 1999. But for now, weapon sales to Middle East buyers, chief among them Saudi Arabia, are...